The Namibian (Windhoek)

24 January 2013

Namibia: N$60 Million Rail Tender Recalled

THE Namibia Tender Board in the Ministry of Finance has withdrawn a controversial N$60 million tender for upgrading the defunct railway between Lüderitz and Aus.

The permanent secretary in the Ministry of Works, Peter Mwatile, said yesterday that the tender was cancelled and wouldn't be re-advertised.

He did not specify the reasons of the cancellation, but it is understood that the ministry found evidence of a conflict of interest on the part of some officials involved in the tendering process.

The chairperson of the Tender Board and Finance Permanent Secretary, Ericah Shafudah also confirmed the cancellation of the tender, saying "irregularities were picked up by the Ministry of Works during the evaluation process of the tender and these were presented to the Board".

She said she could not go into the specifics of the irregularities, "because there is a legal challenge that our lawyers are busy with".

The tender was for upgrading the Aus-Lüderitz railway line, for which the successful bidder had to procure and deliver rails.

Mwatile said because of a shortage of funds and other pressing priorities of the ministry, they will push the job to the next financial year or thereafter.

The decision to withdraw the tender attracted criticism from the successful bidder, who threatened to take legal action.

According to Mwatile, he has received a letter from the company, asking for information and clarity "because they wanted to take the legal route".

Mwatile said he did not know where the company got the information about the withdrawal before the Tender Board had informed them.

The ministry initially recommended to the Tender Board that a joint venture between Profile Investments and Voestalpine-Vae SA be awarded the N$62 million job.

However after close scrutiny, the ministry discovered that there was a conflict of interest, since the consultant appointed by the Ministry of Works to the project was also the principal agent for D&M, which Profile-Vae SA had subcontracted to do some of the work. The consultant had allegedly designed the tender in such a way as to favour Profile-Vae.

At the end of last year, the Finance Ministry wrote to the Tender Board calling for the cancellation of the tender."The consultant of the tender, K&A Partnership Consulting Engineers, represented by M [Michael] Rumsey whose firm is also the principal agent of D&M Rail Construction, is regarded as biased or in conflict of interest," Mwatile wrote to the Tender Board.

Profile-VAE appointed D&M Rail Construction to deliver the rails. D&M is owned by businessmen John Walenga and James Hatuikulipi.

Walenga was also a part owner of Profile Investment until 2010. D&M was earlier this year in the news after it emerged that it was favoured by the Ministry of Works for railway contracts ahead of TransNamib.

In the letter to the Tender Board, the PS said the evaluation report done by K&A Partnership Consulting Engineers was found to be biased.

Mwatile wrote that, for instance, the consultant disqualified one applicant, Oshana Wholesalers, for not providing a "bid guarantee", which was not part of the requirements, and the appointment of subcontractors, which was also not a prerequisite.

Asked why the ministry had allowed the process to get that far before raising red flags, Mwatile said the decision was taken without going through technical vetting and was only discovered after new evaluation committees were established.

Mwatile is said to have been against giving the job to Profile-VAE because the company had previously received many similar contracts and that was not in line with a "fair distribution of work".

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